Would a tax on sugary drinks create a decline in their sales amongst the public? A recent study coming out of the United Kingdom supports this idea. Some may be familiar with the Jamie’s Italian restaurant chain run by famous chef Jamie Oliver. The chain created a health campaign in 2015 that saw an added ten pence (approximately $0.13) to its sugary drinks, as well as offering new drinks with lowered sugar content.
As such, the chain noticed an 11 percent decrease in sugary bevvies once the fee was tacked on; within 12 weeks of launching the initiative. Over the next six months, post-added fee, sugar-sweetened drinks decreased by just over nine percent each patron.
Senior Author of the study, Steven Cummins, chimed in on his research stating that sugar taxes are becoming quite popular policies choices to help curb obesity numbers and enhance diets among the public. He also went on to state that there is little proof they work in practice, as there are only a couple of research projects out there that have reviewed the impact these fees can have in real-life.
CNN reported that Cummins and colleagues dived into the data from Jamie’s Italian health initiative in hopes to add additional knowledge to this sugary-fee theory.
After the UK’s National Health Service made it public about their concerns with sugar and the nation’s increased obesity rates, Jamie’s Italian chain decided to add the ten pence to their sugary drinks to increase awareness of sugar presence in soft drinks. Profits from this added fee would be given to The Children’s Health Fund.
Cummins added that he and his team had zero control over the delivery or design of the initiative. The chain implemented the fee, altered its menu to lay the reasoning behind the new price tag, added new fruit spritzer non-alcoholic drink options (fruit juice with water), and developed promo materials. Jamie Oliver also produced an hour-long documentary that was broadcasted days prior to the new fee being added.
When looking at the sales numbers prior and post the health initiative, numbers revealed that 12 months before, over 2,000,000 non-alcoholic drinks were sold, with 38 percent of those being sugary beverages. Adding this ten pence was linked to tremendous sales declines per patron, with the highest decrease relating to higher sugar content drink sales, per customer.
Still, Cummins did add that they don’t know exactly what each customer substituted their sugary drink for. It could have been water, the fruit spritzers, or an alcoholic bevvy. The team also added that a longer follow-up time period is needed to review whether or not these effects were sustained.